Sound Off - Industry players discuss the Sprint/Clearwire WiMAX deal

On May 7 Sprint and Clearwire announced plans to combine their WiMax businesses and create a new company (called Clearwire) with a $3.2 billion investment from Intel, Google, Comcast, Time Warner Cable and others. Here's what members of the wireless industry are saying about the deal. If you would like to weigh in on this deal, answer our poll question here.

 

"The biggest challenge is getting all these companies that are important participants to agree on the essential value proposition, both from a marketing and distribution standpoint. How will this relate to Sprint, if Sprint remains a standalone wireless company? If Sprint continues to be standalone wireless company as it is today, how do they promote the value proposition of the new WiMAX entity vis-a-vis their own cellular network? What is the value proposition for Sprint if there is Clearwire? That's a key issue.

Another issue is defining the essential value proposition of this network, which will essentially be a 4G network built form scratch. If its value proposition is data, this is the first time in the history of the U.S. since Metricom, that we will have a network that is solely for data. Will it be sustainable as a data-only network? I presume you will be able to run VOIP but what does that mean to the Sprint's cellular network? What does that mean for the cable companies that are already offering essentially VOIP service? --Mark Lowenstein, managing director, Mobile Ecosystem.

mark lowenstein
"This is a big day for WiMAX, and it lends a lot of credibility for us to build our business model. We have always talked about the business model first. We are talking about broadening the chipset system, getting WiMAX into consumer electronics, eliminating subsidies and instituting at-home provisioning so customers don't have to stand in line. Those are all part in parcel to really change the mobile broadband experience in a way it ought to be." --Atish Gude, senior vice president of mobile broadband operations with Xohm. atish gude
"The new Clearwire will have a substantial time-to-market advantage over others who just acquired spectrum. Clearwire will have a solid foundation for next-generation products and services. It's the largest spectrum position held by a company in America. It will provide high-capacity services at a low cost." --Dan Hesse, CEO of Sprint, during a conference call about the new venture. dan hesse
"This will dramatically advance WiMAX. Our expanded relationship with Intel and Google will help fulfill the vision of an open network. We will resell wireless through wholesale arrangements and bring in new wholesale revenue streams." --Ben Wolff, CEO of Clearwire, during a conference call about the new venture. ben wolff
"The New Clearwire announcement is a much-needed good news story for the WiMAX industry after months of delays, uncertainty and speculation. This is important news not only in the U.S., but internationally. Many greenfield and 2G operators worldwide are closely watching the development (or lack of development) of WiMAX in the U.S. as an indication of the real prospects for 802.16e. Although I don't believe the new Clearwire deployment will reach 100 million POPs as quickly as 2010 (as stated by Clearwire), it will provide the much-needed volumes to the emerging device and application ecosystem upon which WiMAX hopes to distance itself from LTE. It remains to be seen how these diverse players will learn to work together and what will happen to Sprint's 3G + network." --Adlane Fellah, CEO & Founder, MARAVEDIS Inc. adlan fellah

"TBR believes Sprint and Clearwire's May 7 announcement--that the two companies will combine their WiMAX businesses into a single entity--has the potential to establish a significant competitor to the traditional U.S. wireless operators, one with a time-to-market advantage for 4G services. Moreover, the affiliation with cable operators, particularly the nations' two largest cable operators Comcast and Time Warner Cable, helps address questions regarding the business model supporting WiMAX deployment. From an equipment perspective, the announcement provides a vehicle for a number of firms seeking a presence in the next-generation mobile business, firms that had to take a back seat to larger, more established incumbents in 3G deployments.

"The deal will provide efficiencies--and funding--to expedite the rollout of the network, providing the new company with a time-to-market advantage by launching a 4G network well before Verizon Wireless' and AT&T's planned LTE launches between 2010 and 2012. TBR expects the combined WiMAX assets of Sprint and Clearwire to produce significant synergies, allowing the companies to provide a nationwide network at a lower cost." --Kate Price, analyst, Technology Business Research.

 

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